May 14, 2014
By Bob Matyi

West Virginia PSC confirms Felman SiMn power rate

West Virginia regulators denied requests to reconsider a favorable April 3 electricity rate ruling for Felman Production on May 14, potentially clearing the last major hurdle to restart the company's 105,000 mt/year silicomanganese plant in New Haven, idled last July. 

The West Virginia Energy Users Group and Consumer Advocate Division of the Public Service Commission had asked the PSC to reconsider its approval of a power rate discount of up to $9 million/year for Felman, which had sought $9.5 million a year for 10 years.

The special rate is with Appalachian Power, an American Electric Power subsidiary that has supplied electricity to the plant for several years.   

But the PSC tossed out the challenges, saying neither petition "demonstrated factual or legal grounds justifying reconsideration of the April 3, 2014, commission order in this matter."    

The PSC concluded it "properly determined that Felman is eligible for a special rate and the commission correctly balanced the interests of the parties" in the April order.     

Felman representatives could not be reached immediately for comment on the latest PSC action, but previously, company spokesman John McKenna said the Florida-based company was delaying a final restart decision until regulatory challenges to the April order were resolved.    

On May 7, Roy Martin, vice president of United Steelworkers Local 5171 at the plant, said in an interview that Felman had told union officials it hoped to resume production in early June. 

In mid-April, the local union ratified a revised labor agreement with Felman after having initially rejected the tentative deal. Although most terms of the updated accord have not been disclosed publicly, the union said the affirmative vote extended the existing collective bargaining agreement until June 2017.

The domestic market for silicomanganese is about 400,000 mt/year, with the New Haven plant representing about 25% of that market. The plant was understood to be operating at, or close to, full capacity when production was suspended, because of low silicomanganese prices.      

Felman, along with its parent company, Georgian American Alloys, part of Ukraine's Privat Group, was estimated by market participants to have a US market share of just over 50% before Felman stopped producing, supplying the US with imported silicomanganese from Georgia and with Felman's domestic production. 

Several steel mills, where Felman had been an incumbent supplier, did not cover their 2014 annual silicomanganese requirements on long-term contracts this year and used the spot market, or bought on a quarterly basis, instead. Some mills are understood to have since entered into long-term supply agreements for the balance of the year.

Silicomanganese prices have risen to 59.50-62.00 cents/lb from 49.50-51.00 cents at the time Felman stopped producing, according to Platts' assessments.